Use this tool to estimate how much a levered fund would need to buy or sell to maintain its mandated levered exposure. You should make a copy of the sheet for your own use.
A few points to consider:
- AUM changes faster than the position size by the amount of the leverage factor
- Inverse funds require 2x the adjustment of their long counterparts! So a levered inverse SPY fund would require 2x the adjustment of a levered long SPY fund.
- For more detailed explanation of why funds must adjust their positions see my explanation of shorting.
Preview:
